JD Sports Fashion, the sportswear group which also owns Blacks and Go Outdoors and has a controlling stake in Scottish outdoor retailer Tiso, has bucked the high street gloom with a winning performance in its first half.
Sales in the UK leapt 10 per cent on a like-for-like basis, with the firm noting that customers were reacting positively to the retailer’s push towards more premium products and a strong online business.
The results for the 26 weeks ended 3 August showed that pre-tax profits hit £129.9 million on revenues of £2.72 billion. An interim dividend of 0.28p is up from 0.27p a year earlier.
Executive chairman Peter Cowgill did have a warning for landlords, however, hinting that he would expect rent reviews following several high street rivals using an insolvency process to help push through rent reductions.
He said: “We are very aware of the financial benefit that other retailers appear to get when they downsize their estates and, whilst we have no plans to fundamentally alter the size of the JD store network in the UK at this time, we continue to seek fairness and flexibility in the terms of our leases.”
The group’s gyms business grew to 120,000 members across 25 locations, and bosses plan to open four additional sites this year.
But there was some disappointment at its Go Outdoors arm, on the back of poor availability during May and June due to a change in the way products reached the stores.
Updating investors on its outdoor business, the group noted: “Trading in the Blacks and Tiso businesses improved significantly through the second quarter.
“These businesses operate out of smaller space than Go Outdoors with less reliance on camping to drive footfall and sales in the summer season.
“Consequently, the cooler and somewhat wetter summer through the UK provided more opportunities for positive trading compared to the hot and dry weather of the prior year with both of these businesses ending the half year period with a total like-for-like sales growth across stores and online of 3 per cent.”
On Brexit, Cowgill warned that “we recognise that there is heightened uncertainty surrounding the nature of the UK’s exit from the European Union and we are very cognisant of the increases risk of a disorderly exit”.
To help offset any problems, he revealed that plans for a new warehouse in Belgium, which had been due sometime after 2021, have been brought forward to ensure its European operations do not suffer.
In Europe, JD Sports revealed it had opened 23 stores during the period, including one in Austria for the first time. A flagship store in Paris is also on its way.
Richard Hunter, head of markets at Interactive Investor, said: “The momentum which has seen the company grow apace and propelled the shares into the FTSE 100 shows no signs of abating, as JD Sports has unveiled another set of impressive numbers.
“Given the speed and scope of expansion, there will inevitably be bumps along the way, as evidenced by the challenges of the fulfilment transition relating to the Go Outdoors business, which has had a short-term negative impact,” he added.